Hold the Presses is your online newsportal en brings press releases from around the world. Journalists can use it for free, although it is their responsibilty to check the news. Hold the Presses is in no way responsible for the content of the press releases, the Sender is.
We hope you enjoy reading the news we bring you on this website. If a message is published that is not acceptable, we apologize. Please contact us and we will remove the message as soon as possible.

Tokmanni expects revenue growth for 2017 based on the revenue from new stores opened in 2016 and 2017. Revenue of like-for-like stores is expected to remain at the level of the previous year. Group profitability (adjusted EBITDA%) is expected to decrease from last year's level.

TOKMANNI'S INTERIM CEO HARRI SIVULA: SECOND QUARTER REVENUE GREW 1.9%

" As communicated in June, the exceptionally cold spring and the delayed summer negatively affected our sales. Even in May we had several days with snow all over Finland, but in June the weather improved. As a result, trading picked up and our second-quarter revenue grew by 1.9% on the previous year. As we predicted, our Like-for-Like sales and profitability, however, deteriorated from the previous year's high level. The weakening of profitability was partly affected also by the exceptionally high number of stores opened this year.

It is important to remember that due to the seasonal nature of our business, the sales and profitability of the second half of the year are generally stronger than the beginning of the year and that seasons are generally less weather dependent at the end of the year than at the beginning of the year. Nevertheless, we can't be satisfied with the 2017 progress so far and we further intensified our action already in the spring to improve our Like-for-Like sales and profitability, with even more emphasis on our pricing strategy, campaigning and by developing our assortment. This work continues. The seasons are very important to us and we will continue to invest heavily in them. However, we are investing more and more in the sales of less weather dependent private labels. We continue to develop our assortment to continuously provide customers with interesting products and stock lots between seasons. At the same time our strict cost control continues. The shelf availability issues, which we experienced in the spring following the implementation of the new assortment management tool, have now been solved and the tool will in the future support among others our campaigning work.

The recovery of the Finnish economy has been faster than expected in 2017 but economic growth is not yet fully reflected in the non-grocery market. In 2017, the purchasing power of consumers is not predicted to be strengthened, but the growth in private consumption will be supported by, among others increased employment and high consumer confidence, and due to that, we forecast a slight recovery in the non-grocery market as well in 2017.

I am very pleased with Mika Rautiainen's appointment as our new CEO. Mika's competence and capabilities will bring us significant added value in the implementation of our strategy and in further developing our strong market position. Tokmanni has a strong market position, a clear strategy and strategic goals. We will continue our determined work towards becoming Finland's leading, modern, omni-channel discount retailer."

KEY FIGURES

4-6/2017

4-6/2016

Change%

1-6/2017

1-6/2016

Change%

1-12/2016

Revenue, MEUR

196.0

192.4

1.9%

352.6

350.6

0.6%

775.8

Like-for-like revenue development, %

-1.9

-2.7

-0.1

Number of baskets, M

11.7

11.4

3.1%

21.5

20.8

3.4%

44.7

Gross profit, MEUR

65.6

67.8

-3.2%

114.3

119.5

-4.3%

268.4

Gross margin, %

33.5

35.2

32.4

34.1

34.6

Adjusted gross profit, MEUR

66.8

67.1

-0.5%

116.0

119.6

-3.0%

267.9

Adjusted gross margin, %

34.1

34.9

32.9

34.1

34.5

Operating expenses

-55.8

-52.2

6.9%

-108.9

-103.5

5.2%

-207.4

Adjusted operating expenses

-56.0

-52.7

6.3%

-107.6

-103.7

3.7%

-208.5

EBITDA, MEUR

10.7

16.4

-34.9%

7.1

17.5

-59.6%

64.3

EBITDA, %

5.4

8.5

2.0

5.0

8.3

Adjusted EBITDA, MEUR

11.6

15.2

-23.8%

10.1

17.4

-42.0%

62.8

Adjusted EBITDA, %

5.9

7.9

2.9

5.0

8.1

Operating profit (EBIT), MEUR

7.2

12.6

-42.8%

-0.1

9.9

-100.7%

49.2

Operating profit margin EBIT, %

3.7

6.6

0.0

2.8

6.3

Adjusted EBIT, MEUR

8.1

11.4

-28.8%

2.9

9.8

-69.8%

47.7

Adjusted EBIT, %

4.1

5.9

0.8

2.8

6.1

Net financial items, MEUR

-1.4

-7.2

-79.9%

-2.8

-12.3

-77.4%

-15.2

Net capital expenditure, MEUR

0.0

1.6

-99.6%

1.5

3.0

-48.5%

9.8

Net debt / adjusted EBITDA **

3.1

2.6

3.1

2.6

1.8

Net cash from operating activities, MEUR

18.8

23.6

-19.1

8.3

62.5

Return on capital employed, %

2.2

3.8

0.0

3.0

14.5

Return on equity, %

3.4

3.4

-1.7

-1.6

18.1

Number of shares, weighted average during the financial period (thousands)*

58 869

54 095

58 869

49 322

54 095

Earnings per share (EUR/share)*

0.08

0.08

-0.04

-0.04

0.50

Personnel at the end of the period

3 534

3 503

3 534

3 503

3 224

Personnel on average in the period

3 312

3 286

3 184

3 191

3 209

* The amount of shares 2016 has been adjusted with the effects of the bonus issue ('share split') carried out 04/2016.

** Rolling 12 months adjusted EBITDA.

MARKET OUTLOOK

The Finnish economy has improved during 2017. Growth at the beginning of 2017 has been much faster than anticipated and the Ministry of Finance has raised its GDP growth forecast for 2017 to 2.4%.

The rapid increase in economic activity brought an upswing in employment during the spring of 2017 and as a consequence the unemployment rate is estimated to fall from approximately 8.8% at the end of 2016 to approximately 8.5% in 2017. The growth in the Index of wage and salary earnings is projected to remain low at around 0.2% due to the zero increase and cut in holiday pay included in the Competitiveness Pact (KiKy). Average earnings are projected to remain at the level of the previous year owing to the increase in working hours due to the Competitiveness Pact. At the same time the forecast for the current year's inflation is 1.0 per cent, calculated based on the consumer price index. Hence, the purchasing power of consumers is not predicted to increase in 2017. The private consumption is however expected to continue increasing in 2017 year boosted by rising employment and high consumer confidence.

Tokmanni expects that the Finnish non-grocery retail market will grow slightly in 2017 and that specialty stores and online stores will continue to strengthen their positions.

ANALYST AND PRESS BRIEFING

An analyst and press briefing, which will be hosted by interim CEO Harri Sivula and CFO Markku Pirskanen, will be held on the publication day at 10.00 am EEST (9.00 CET) at the Hotel Kämp, Paavo Nurmi cabinet (2nd floor), Kluuvikatu 2, Helsinki. The conference is in Finnish and will also be webcasted. An audiocast in English will be held at 11.15 am EEST (10.15 CET).

The participants can also join a telephone conference that will be arranged in conjunction with the live webcasts. The participants are asked to dial in 5-10 minutes prior to starting time using the Participant Phone Number and Participant Passcodes below:

Tokmanni is the largest general discount retailer in Finland measured by number of stores and revenue. In 2016, Tokmanni's revenue was EUR 776 million and on average it had approximately 3,200 employees. Tokmanni is the only nationwide general discount retailer in Finland, with 162 stores across Finland as at 31 December 2016.